Macedonia's high property prices refuse to come down

The global financial crisis and the country’s political stalemate have not reversed the steady climb in real estate prices. A square metre in a flat in the Macedonian capital, Skopje, still sells for between 1,000 and 1,500 euro, statistics show, making purchase of a home for people on average salaries of about 330 euro a month almost impossible. Real estate agencies say prices of flats are staying high in Macedonia, despite the sluggish demand. "We're having hard time selling flats and houses because only those who have to buy are actually deciding to buy," Marija Todorova, from the Avenija real estate agency, told Balkan Insight. "The rest are waiting for prices to drop."

The agency said that only small flats of below 50 square metres sold relatively well, because many people cannot afford anything bigger. Real estate prices jumped two years ago on the eve of the 2008 NATO summit in Bucharest, Romania. In expectation of joining the Alliance at the summit, confidence grew in the country and real estate prices soared accordingly. However, prices failed to come back down after Macedonia left the NATO summit empty-handed because of its unresolved dispute with neighbouring Greece over its name, which Athens objects to.

Even the global financial crisis has not dampened prices. Data from Macedonia’s Chamber of Commerce show they have continued to grow, albeit slowly. The Ministry of Transport, in charge of financing social housing, hopes to reduce real estate prices by offering more state-built apartments. This month, authorities began construction of a new complex of social housing in the capital, comprising 14 new buildings. At the groundbreaking ceremony, Minister Mile Janakieski expressed hopes that the increased availability of social housing “will dampen average prices and so eventually make housing available to the broader population".

Some construction companies say they have to keep prices of private homes high because building materials are more expensive than they were. "The price of iron, concrete, plaster and other materials is relatively high on world markets, which has increased our construction costs and dictates the [high] prices," Naum Sotirov, a construction engineer for one local construction company, told Balkan Insight. The daily "Utrinski Vesnik" has calculated that it would take 155 average salaries, or 13 years' worth of salaries, for a worker on average pay to amass the 52,000 euro needed to buy an apartment of 60 square metres.

News source: BalkanInsight link: article